In an effort to boost recording activity in the state, Louisiana has enacted the nation’s first investment-based tax incentive for music recording.
The program—which took effect January 1 and expires after two years unless renewed by state lawmakers—is modeled after successful incentives for motion pictures in Louisiana and other states. Film production spending in the state grew from $20 million a year in 2002 (when the film incentives were established) to more than $220 million in 2005. Louisiana officials now hope that their Sound Recording Investor Tax Credit will yield a similar jump in record production, as well as the spending that goes with it.
The music recording incentive will give ten to 20 percent back on money spent in the state for production. The minimum expense to qualify is $15,000 (spent over the course of a year, not necessarily on one project) and is for production only, not marketing.
The incentive is the only one of its kind in the U.S. Texas offers a rebate on sales taxes for music recording. The Canadian province of Ontario offers a tax credit that includes marketing costs, but only for Canadian companies producing local talent.
Louisiana will send a reimbursement check to labels or producers (whoever invests in the recording) regardless of where they or the artists are based.
For more information, visit www.louisianamusicexport.com/tax.html.